In economically-ravaged Venezuela, bitcoin has proven to be an important alternative currency, according to an article in Reason Magazine. And because the government supports cheap electricity, bitcoin mining is highly profitable.
But while bitcoin mining has helped provide an economic lifeline to much of the country and made miners wealthy, government harassment and violent crime have dogged the country’s mining community.
As the country’s economy further disintegrates, bitcoin becomes more widely used as both cash and the national currency have lost much of their value.
Bitcoin has more purchasing power in Venezuela than the government-issued currency. The bolivar trades for around one-thirtieth of a penny on the black market.
Some Venezuelan bitcoin miners fell into the profession in search of work. Skilled professionals such as computer scientists have had trouble finding reliable work as the economy has crumbled. For many such professionals, bitcoin mining offers a way to earn a good living.
The main factor encouraging Venezuelans to take up bitcoin mining is the virtually free electricity. Bitcoin mining requires a lot of electricity.